Powell: Malloy’s explanation of ‘shortfall’ falls short

Despite last year’s record state tax increase, Connecticut is facing a “shortfall” of $365 million in the current year’s state budget because, Gov. Malloy says, amid the continuing economic recession tax revenue has fallen far behind estimates and claims on Medicaid have risen far above estimates.

Malloy isn’t the only governor who planned for the recession to have lifted by now, but his explanation of the budget problem is incomplete if not disingenuous. For despite the recession the Malloy administration has never tried hard to economize. It just reduced the state budget’s rate of increase a little. Indeed, the Malloy administration is most notable for a great expansion of the scope of state government, and its expansion of eligibility for Medicaid is just part of it.

The administration created a state version of the federal earned-income tax credit, cash payments to people who don’t earn enough to pay state income tax.

The administration increased state grants to municipal education, which are mainly just subsidies for raises for teacher unions.

The administration created a program of corporate welfare dressed up as economic development, paying hundreds of millions of dollars to profitable businesses to stay or expand in Connecticut, including $115 million for the biggest hedge fund to relocate a few miles from Westport to Stamford, the governor’s hometown.

The administration has undertaken two expensive public works projects for which there was no demand and little need, the bus highway between Hartford and New Britain and the high-speed railroad between New Haven and Springfield.

The administration failed to obtain substantial concessions from the state employee unions, which gave up some but not all raises and received a four-year guarantee of job security. Amid the record tax increases he imposed, the governor described the union concessions as “shared sacrifice,” but the taxpayers sacrificed far more than the unions did and municipal employee unions lost nothing — and now the state employees will be exempt from any sacrifice at all for a few years no matter how much worse the economy gets.

As the governor, a Democrat, says he has “no intention” of raising taxes again and will close the budget “shortfall” by cutting, the basic problem with Connecticut’s Democratic Party may become clear. That is, in the Democratic philosophy government employees themselves come first. Only they enjoy collective bargaining, binding arbitration, inviolable contracts, and other guarantees. Taxpayers and the poor must always be ready to fend for themselves.

If state taxes are not raised again, services to the poor almost certainly will be cut. And taxes likely will go up again even without another state tax increase. For the state income tax credit against residential property taxes could be reduced. So could state financial grants to municipal education, and municipalities will respond not by obtaining concessions from municipal employee unions but by raising property taxes so that municipal employees, like state employees, may also avoid serious sacrifice.

Even as the huge “shortfall” for the current budget and a projection of a billion-dollar “shortfall” for the next budget were disclosed the other day, the University of Connecticut announced that it had hired a vice president for communications who will be paid $228,000 annually, $78,000 more than the governor himself is paid. Also simultaneously, in a review of higher education bloat nationally, Bloomberg News reported that UConn has 14 administrators paid around $300,000. Of course UConn’s new president is paid what should be a notorious $500,000.

The governor doesn’t seem to realize how grotesque this all looks amid hard times, nor that he appoints UConn’s Board of Trustees.

What opportunities there are here for issues for the next Republican candidate for governor, including the opportunity to seize the plutocracy issue from the Democrats.

Chris Powell is managing editor of the Journal Inquirer in Manchester.